'Aurora Is Not For Sale,' Cannabis CEO Terry Booth Says

December 11, 2018

By Chloe Aiello

Big beverage and big tobacco may be seducing some players in the burgeoning marijuana market, but Canada-based Aurora Cannabis is not one of them. In a Tuesday interview with Cheddar, CEO Terry Booth said it's just too soon for his company, one of the world's largest medical marijuana producers, to jump in bed with a major name in alcohol or tobacco.

"Big pharma, big booze, big alcohol, big tobacco, big beverage, big snack industries are looking at cannabis and its derivatives," Booth said. "It is too early in my opinion to lock horns with any of those big players."

Booth's comments follow Aurora's announcement it would acquire Mexican partner Farmacias Magistrales S.A., as it moves to expand its distribution of higher-margin derivative THC products into Mexico. Farmacias recently became Mexico's first and only federally licensed importer of raw materials containing THC. Booth said that deal makes sense for a medical marijuana-producer like Aurora, whereas a beverage or tobacco deal would not.

As recently as September, BNN reported Aurora ($ACB) was in "serious talks" with Coca Cola ($KO) to develop a cannabis-infused beverage. The company quickly responded, saying it had not partnered with Coca Cola ー or any beverage giant.

"The Company does confirm that it engages in exploratory discussions with industry participants from time to time," Aurora said in a press release. "At this time the Company confirms there is no agreement, understanding or arrangement with respect to any partnership with a beverage company."

Coca Cola also swatted down rumors it was interested in cannabis following the report, but said it was monitoring the growing CBD market.

If Aurora partnered with a beverage or tobacco company it would come as little surprise to spectators ー especially given recent activity in the industry. Just last week, shares of Cronos Group shot up on news Marlboro parent company Altria ($MO) agreed to take a $1.8 billion stake in the company. Months earlier, Constellation ($STZ), parent company to Corona and Modelo, upped its share in Canopy Growth to about 40 percent. And Molson Coors also got in on pot, announcing a joint partnership with a Canadian company to develop and market cannabis-infused drinks.

But Booth said Aurora has no plans to enter into an agreement that might sell-off a majority stake in the company.

Deals like that "can lead to an ownership stake by these big companies," he said. "Aurora is not for sale."

He also emphasized Aurora is a "medical cannabis company first." Deals with alcohol, tobacco, or beverage companies might not be in the works for Aurora, but Booth said the company is eyeing the hemp industry in the U.S. ー especially with a new farm bill on the table in Congress that would legalize industrial hemp.

Booth was cautiously optimistic about the potential of hemp and CBD in the U.S. Gaining access to the massive U.S. markets for hemp and potentially CBD would help Aurora's business significantly but Booth cautioned "signing a bill is one thing ... getting the regulations around how it's all going to work is another thing."

Once all of the regulatory wrinkles are ironed out, he said, "we will be in the United States with respect to hemp, no doubt."